Exhibit 99.1
NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
(407) 265-7348 |
FOR IMMEDIATE RELEASE |
November 2, 2021
THIRD QUARTER 2021 OPERATING RESULTS AND 2022 GUIDANCE
ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.
Orlando, Florida, November 2, 2021 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter and nine months ended September 30, 2021. Highlights include:
Operating Results:
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
||||
|
|
(in thousands, except per share data) |
|
|
|||||||||||||
Revenues |
|
$ |
180,357 |
|
|
$ |
158,633 |
|
|
$ |
539,146 |
|
|
$ |
497,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings available to common stockholders |
|
$ |
78,448 |
|
|
$ |
51,584 |
|
(1) |
$ |
199,088 |
|
|
$ |
154,057 |
|
(1) |
Net earnings per common share |
|
$ |
0.45 |
|
|
$ |
0.30 |
|
(1) |
$ |
1.14 |
|
|
$ |
0.89 |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
FFO available to common stockholders |
|
$ |
124,621 |
|
|
$ |
106,423 |
|
|
$ |
347,304 |
|
|
$ |
320,670 |
|
|
FFO per common share |
|
$ |
0.71 |
|
|
$ |
0.62 |
|
|
$ |
1.99 |
|
|
$ |
1.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Core FFO available to common stockholders |
|
$ |
124,621 |
|
|
$ |
106,423 |
|
|
$ |
368,632 |
|
|
$ |
337,349 |
|
|
Core FFO per common share |
|
$ |
0.71 |
|
|
$ |
0.62 |
|
|
$ |
2.11 |
|
|
$ |
1.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
AFFO available to common stockholders |
|
$ |
131,753 |
|
(2) |
$ |
106,690 |
|
(3) |
$ |
399,660 |
|
(2) |
$ |
311,680 |
|
(3) |
AFFO per common share |
|
$ |
0.75 |
|
(2) |
$ |
0.62 |
|
(3) |
$ |
2.29 |
|
(2) |
$ |
1.81 |
|
(3) |
(1) |
|
Includes a write-off of $14,758 (or $0.09 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and nine months ended September 30, 2020. |
(2) |
|
Amounts include $4,294 and $21,996 of net straight-line accrued rent from rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and nine months ended September 30, 2021, respectively. Excluding such, AFFO per common share would have been $0.73 and $2.16 for the quarter and nine months ended September 30, 2021, respectively. |
(3) |
|
Amounts exclude $8,499 and $38,938 of net straight-line accrued rent from rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and nine months ended September 30, 2020, respectively. Including such, AFFO per common share would have been $0.67 and $2.04 for the quarter and nine months ended September 30, 2020, respectively. |
Third Quarter 2021 Highlights:
1
Third Quarter 2021 Highlights (continued):
Highlights for the nine months ended September 30, 2021:
NNN has entered into rent deferral lease amendments with certain tenants, for an aggregate $4,758,000 and $52,019,000 of rent originally due for the years ending December 31, 2021 and 2020, respectively. The rent deferral lease amendments require the deferred rents to be repaid at a later time during the lease term. Approximately $3,259,000 of deferred rent was repaid in 2020 and $27,087,000 of deferred rent was repaid during the nine months ended September 30, 2021.
Core FFO guidance for 2021 was increased from a range of $2.75 to $2.80 per share to a range of $2.80 to $2.84 per share. The 2021 AFFO is estimated to be $3.00 to $3.04 per share. The Core FFO guidance equates to net earnings of $1.64 to $1.68 per share, plus $1.16 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate, any charges for impairments, preferred stock redemption charges and loss on early extinguishment of debt. The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.
The company also announced 2022 Core FFO guidance of $2.90 to $2.97 per share and estimated 2022 AFFO to be $2.99 to $3.06 per share. The Core FFO guidance equates to net earnings of $1.73 to $1.80 per share, plus $1.17 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate, and any charges for impairments. The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.
Jay Whitehurst, Chief Executive Officer, commented: "We are pleased to report another solid quarter for National Retail Properties, with increasing acquisition volume, continued high occupancy and rent collections, and a rock solid balance sheet. Our impressive performance positions us to once again raise guidance for 2021 and to announce 2022 guidance that reflects our long-term strategy to consistently produce mid-single digits growth per share on a multi-year basis."
National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2021, the company owned 3,195 properties in 48 states with a gross leasable area of approximately 33.0 million square feet and with a weighted average remaining lease term of 10.6 years. For more information on the company, visit www.nnnreit.com.
Management will hold a conference call on November 2, 2021, at 10:30 a.m. ET to review these results. The call can be accessed on the National Retail Properties web site live at http://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company’s web site. In addition, a summary of any earnings guidance given on the call will be posted to the company’s web site.
Statements in this press release that are not strictly historical are “forward-looking” statements. These statements generally are characterized by the use of terms such as "believe," "expect," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, the potential impacts of the COVID-19 pandemic on the company’s business operations, financial results and financial position and on the world economy, general economic conditions, local real estate conditions, changes in interest rates, increases in operating costs, the preferences and financial condition of the company's tenants, the availability of capital, and, risks related to the company's status as a REIT. Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (the "Commission”) filings, including, but not limited to, the company’s (i) Annual Report on Form 10-K for the year ended December 31, 2020 and (ii) Quarterly Report on Form 10-Q for the quarter and nine months ended September 30, 2021. Copies of each filing may be obtained from the company or the Commission. Such forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release.
2
National Retail Properties, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.
Funds From Operations, commonly referred to as FFO, is a relative non-GAAP financial measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and is used by the company as follows: net earnings (computed in accordance with GAAP) plus depreciation and amortization of assets unique to the real estate industry, excluding gains (or including losses), any applicable taxes and noncontrolling interests on the disposition of certain assets, the company’s share of these items from the company’s unconsolidated partnerships and any impairment charges on a depreciable real estate asset.
FFO is generally considered by industry analysts to be the most appropriate measure of performance of real estate companies. FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the company’s performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers FFO an appropriate measure of performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. The company’s computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to FFO, as defined by NAREIT, is included in the financial information accompanying this release.
Core Funds From Operations (“Core FFO”) is a non-GAAP measure of operating performance that adjusts FFO to eliminate the impact of certain GAAP income and expense amounts that the company believes are infrequent and unusual in nature and/or not related to its core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the REIT industry, and management believes that presentation of Core FFO provides investors with a potential metric to assist in their evaluation of the company’s operating performance across multiple periods and in comparison to the operating performance of its peers because it removes the effect of unusual items that are not expected to impact the company’s operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of the company’s core business operations and is a factor in determining management compensation. Items included in calculating FFO that may be excluded in calculating Core FFO may include items like transaction related gains, income or expense, impairments on land or commercial mortgage residual interests, preferred stock redemption costs, loss on early extinguishment of debt or other non-core amounts as they occur. The company’s computation of Core FFO may differ from the methodology for calculating Core FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to Core FFO is included in the financial information accompanying this release.
Adjusted Funds From Operations (“AFFO”) is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP. AFFO should not be considered an alternative to net earnings, as an indication of the company's performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers AFFO a useful supplemental measure of the company’s performance. The company’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to AFFO is included in the financial information accompanying this release.
3
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
||||
Income Statement Summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental income |
|
$ |
180,024 |
|
|
$ |
157,865 |
|
|
$ |
537,226 |
|
|
$ |
495,891 |
|
|
Interest and other income from real estate |
|
|
333 |
|
|
|
768 |
|
|
|
1,920 |
|
|
|
1,506 |
|
|
|
|
|
180,357 |
|
|
|
158,633 |
|
|
|
539,146 |
|
|
|
497,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
11,077 |
|
|
|
9,419 |
|
|
|
34,693 |
|
|
|
28,914 |
|
|
Real estate |
|
|
6,521 |
|
|
|
6,345 |
|
|
|
20,865 |
|
|
|
20,304 |
|
|
Depreciation and amortization |
|
|
50,976 |
|
|
|
49,404 |
|
|
|
151,831 |
|
|
|
147,528 |
|
|
Leasing transaction costs |
|
|
86 |
|
|
|
— |
|
|
|
146 |
|
|
|
36 |
|
|
Impairment losses – real estate, net of |
|
|
4,781 |
|
|
|
5,695 |
|
|
|
14,647 |
|
|
|
33,062 |
|
|
|
|
|
73,441 |
|
|
|
70,863 |
|
|
|
222,182 |
|
|
|
229,844 |
|
|
Gain on disposition of real estate |
|
|
9,473 |
|
|
|
148 |
|
|
|
17,935 |
|
|
|
13,637 |
|
|
Earnings from operations |
|
|
116,389 |
|
|
|
87,918 |
|
|
|
334,899 |
|
|
|
281,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other expenses (revenues): |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other income |
|
|
(61 |
) |
|
|
(74 |
) |
|
|
(159 |
) |
|
|
(345 |
) |
|
Interest expense |
|
|
33,518 |
|
|
|
31,924 |
|
|
|
101,190 |
|
(1) |
|
97,347 |
|
(2) |
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
21,328 |
|
|
|
16,679 |
|
|
|
|
|
33,457 |
|
|
|
31,850 |
|
|
|
122,359 |
|
|
|
113,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings |
|
|
82,932 |
|
|
|
56,068 |
|
|
|
212,540 |
|
|
|
167,509 |
|
|
Loss attributable to noncontrolling interests |
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings attributable to NNN |
|
|
82,933 |
|
|
|
56,069 |
|
|
|
212,543 |
|
|
|
167,512 |
|
|
Series F preferred stock dividends |
|
|
(4,485 |
) |
|
|
(4,485 |
) |
|
|
(13,455 |
) |
|
|
(13,455 |
) |
|
Net earnings available to common stockholders |
|
$ |
78,448 |
|
|
$ |
51,584 |
|
|
$ |
199,088 |
|
|
$ |
154,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
174,629 |
|
|
|
172,681 |
|
|
|
174,610 |
|
|
|
171,707 |
|
|
Diluted |
|
|
174,739 |
|
|
|
172,782 |
|
|
|
174,716 |
|
|
|
171,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings per share available to common |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.45 |
|
|
$ |
0.30 |
|
|
$ |
1.14 |
|
|
$ |
0.89 |
|
|
Diluted |
|
$ |
0.45 |
|
|
$ |
0.30 |
|
|
$ |
1.14 |
|
|
$ |
0.89 |
|
|
(1) |
|
Includes $2,078 in connection with the redemption of 3.30% senior unsecured notes due 2023 for the nine months ended September 30, 2021. |
(2) |
|
Includes $2,291 in connection with the redemption of 3.80% senior unsecured notes due 2022 for the nine months ended September 30, 2020. |
4
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
||||
Funds From Operations (FFO) Reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings available to common stockholders |
|
$ |
78,448 |
|
|
$ |
51,584 |
|
(1) |
$ |
199,088 |
|
|
$ |
154,057 |
|
(1) |
Real estate depreciation and amortization |
|
|
50,865 |
|
|
|
49,292 |
|
|
|
151,504 |
|
|
|
147,188 |
|
|
Gain on disposition of real estate |
|
|
(9,473 |
) |
|
|
(148 |
) |
|
|
(17,935 |
) |
|
|
(13,637 |
) |
|
Impairment losses – depreciable real estate, net of |
|
|
4,781 |
|
|
|
5,695 |
|
|
|
14,647 |
|
|
|
33,062 |
|
|
Total FFO adjustments |
|
|
46,173 |
|
|
|
54,839 |
|
|
|
148,216 |
|
|
|
166,613 |
|
|
FFO available to common stockholders |
|
$ |
124,621 |
|
|
$ |
106,423 |
|
|
$ |
347,304 |
|
|
$ |
320,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
FFO per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.71 |
|
|
$ |
0.62 |
|
|
$ |
1.99 |
|
|
$ |
1.87 |
|
|
Diluted |
|
$ |
0.71 |
|
|
$ |
0.62 |
|
|
$ |
1.99 |
|
|
$ |
1.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Core Funds From Operations (Core FFO) Reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings available to common stockholders |
|
$ |
78,448 |
|
|
$ |
51,584 |
|
(1) |
$ |
199,088 |
|
|
$ |
154,057 |
|
(1) |
Total FFO adjustments |
|
|
46,173 |
|
|
|
54,839 |
|
|
|
148,216 |
|
|
|
166,613 |
|
|
FFO available to common stockholders |
|
|
124,621 |
|
|
|
106,423 |
|
|
|
347,304 |
|
|
|
320,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
21,328 |
|
|
|
16,679 |
|
|
Total Core FFO adjustments |
|
|
— |
|
|
|
— |
|
|
|
21,328 |
|
|
|
16,679 |
|
|
Core FFO available to common stockholders |
|
$ |
124,621 |
|
|
$ |
106,423 |
|
|
$ |
368,632 |
|
|
$ |
337,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Core FFO per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.71 |
|
|
$ |
0.62 |
|
|
$ |
2.11 |
|
|
$ |
1.96 |
|
|
Diluted |
|
$ |
0.71 |
|
|
$ |
0.62 |
|
|
$ |
2.11 |
|
|
$ |
1.96 |
|
|
(1) |
|
Includes a write-off of $14,758 (or $0.09 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and nine months ended September 30, 2020. |
5
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
||||
Adjusted Funds From Operations (AFFO) Reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings available to common stockholders |
|
$ |
78,448 |
|
|
$ |
51,584 |
|
(1) |
$ |
199,088 |
|
|
$ |
154,057 |
|
(1) |
Total FFO adjustments |
|
|
46,173 |
|
|
|
54,839 |
|
|
|
148,216 |
|
|
|
166,613 |
|
|
Total Core FFO adjustments |
|
|
— |
|
|
|
— |
|
|
|
21,328 |
|
|
|
16,679 |
|
|
Core FFO available to common stockholders |
|
|
124,621 |
|
|
|
106,423 |
|
|
|
368,632 |
|
|
|
337,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Straight-line accrued rent, net of reserves |
|
|
3,400 |
|
|
|
(2,419 |
) |
|
|
19,091 |
|
|
|
(33,464 |
) |
|
Net capital lease rent adjustment |
|
|
77 |
|
|
|
61 |
|
|
|
262 |
|
|
|
144 |
|
|
Below-market rent amortization |
|
|
(156 |
) |
|
|
(301 |
) |
|
|
(430 |
) |
|
|
(711 |
) |
|
Stock based compensation expense |
|
|
3,898 |
|
|
|
3,258 |
|
|
|
12,320 |
|
|
|
9,580 |
|
|
Capitalized interest expense |
|
|
(87 |
) |
|
|
(332 |
) |
|
|
(215 |
) |
|
|
(1,218 |
) |
|
Total AFFO adjustments |
|
|
7,132 |
|
|
|
267 |
|
|
|
31,028 |
|
|
|
(25,669 |
) |
|
AFFO available to common stockholders |
|
$ |
131,753 |
|
(2) |
$ |
106,690 |
|
(3) |
$ |
399,660 |
|
(2) |
$ |
311,680 |
|
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
AFFO per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.75 |
|
(2) |
$ |
0.62 |
|
(3) |
$ |
2.29 |
|
(2) |
$ |
1.82 |
|
(3) |
Diluted |
|
$ |
0.75 |
|
(2) |
$ |
0.62 |
|
(3) |
$ |
2.29 |
|
(2) |
$ |
1.81 |
|
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental income from operating leases(4) |
|
$ |
175,833 |
|
|
$ |
153,825 |
|
|
$ |
522,787 |
|
|
$ |
481,858 |
|
|
Earned income from direct financing leases(4) |
|
$ |
154 |
|
|
$ |
161 |
|
|
$ |
469 |
|
|
$ |
487 |
|
|
Percentage rent(4) |
|
$ |
195 |
|
|
$ |
160 |
|
|
$ |
530 |
|
|
$ |
728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate expense reimbursement from tenants(4) |
|
$ |
3,842 |
|
|
$ |
3,719 |
|
|
$ |
13,440 |
|
|
$ |
12,818 |
|
|
Real estate expenses |
|
|
(6,521 |
) |
|
|
(6,345 |
) |
|
|
(20,865 |
) |
|
|
(20,304 |
) |
|
Real estate expenses, net of tenant reimbursements |
|
$ |
(2,679 |
) |
|
$ |
(2,626 |
) |
|
$ |
(7,425 |
) |
|
$ |
(7,486 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of debt costs |
|
$ |
1,139 |
|
|
$ |
1,082 |
|
|
$ |
4,022 |
|
(5) |
$ |
3,924 |
|
(6) |
Scheduled debt principal amortization (excluding |
|
$ |
157 |
|
|
$ |
149 |
|
|
$ |
469 |
|
|
$ |
443 |
|
|
Non-real estate depreciation expense |
|
$ |
114 |
|
|
$ |
114 |
|
|
$ |
336 |
|
|
$ |
347 |
|
|
(1) |
Includes a write-off of $14,758 (or $0.09 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and nine months ended September 30, 2020. |
(2) |
Amounts include the net straight-line accrued rent impact of the rent deferral repayments from the COVID-19 rent deferral lease amendments of $4,294 and $21,996 for the quarter and nine months ended September 30, 2021, respectively. Excluding such, AFFO per common share would have been $0.73 and $2.16 for the quarter and nine months ended September 30, 2021, respectively. |
(3) |
Amounts exclude $8,499 and $38,938 of straight-line accrued rent from rent deferral repayments from the COVID-19 rent deferral lease amendments quarter and nine months ended September 30, 2020, respectively. Including such, AFFO per common share would have been $0.67 and $2.04 for the quarter and nine months ended September 30, 2020, respectively. |
(4) |
For the quarter and nine months ended September 30, 2021, the aggregate of such amounts is $180,024 and $537,226, respectively, and is classified as rental income on the income statement summary. For the quarter and nine months ended September 30, 2020, the aggregate of such amounts is $157,865 and $495,891, respectively. |
(5) |
Includes $745 in connection with the redemption of the 3.30% senior unsecured notes due 2023 for the nine months ended September 30, 2021. |
(6) |
Includes $851 in connection with the redemption of the 3.80% senior unsecured notes due 2022 for the nine months ended September 30, 2020. |
6
Earnings Guidance:
Guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Commission.
|
|
2021 Guidance |
|
2022 Guidance |
Net earnings per common share excluding any gains on disposition |
|
$1.64 - $1.68 per share |
|
$1.73 - $1.80 per share |
Real estate depreciation and amortization per share |
|
$1.16 per share |
|
$1.17 per share |
Core FFO per share |
|
$2.80 - $2.84 per share |
|
$2.90 - $2.97 per share |
AFFO per share(1) |
|
$3.00 - $3.04 per share |
|
$2.99 - $3.06 per share |
General and administrative expenses |
|
$46 - $48 Million |
|
$45 - $47 Million |
Real estate expenses, net of tenant reimbursements |
|
$10 - $11 Million |
|
$10 - $12 Million |
Acquisition volume |
|
$550 - $600 Million |
|
$550 - $650 Million |
Disposition volume |
|
$80 - $100 Million |
|
$80 - $100 Million |
(1) |
|
Estimates include the net straight-line accrued rent impact of the rent repayment from the COVID-19 rent deferral lease amendments of $24.9 million for 2021 and $5.4 million for 2022. Absent such, AFFO per common share guidance would have been $2.86 - $2.90 per share for 2021 and $2.96 - $3.03 for 2022. |
7
National Retail Properties, Inc.
(in thousands)
(unaudited)
|
|
September 30, |
|
|
December 31, |
|
||
Balance Sheet Summary |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Assets: |
|
|
|
|
|
|
||
Real estate portfolio |
|
$ |
7,442,473 |
|
|
$ |
7,212,655 |
|
Real estate held for sale |
|
|
9,709 |
|
|
|
5,671 |
|
Cash and cash equivalents |
|
|
543,526 |
|
|
|
267,236 |
|
Receivables, net of allowance of $693 and $835, respectively |
|
|
2,128 |
|
|
|
4,338 |
|
Accrued rental income, net of allowance of $4,922 and $6,947, respectively |
|
|
34,341 |
|
|
|
53,958 |
|
Debt costs, net of accumulated amortization of $18,810 and $17,294, respectively |
|
|
7,960 |
|
|
|
1,917 |
|
Other assets |
|
|
92,808 |
|
|
|
92,069 |
|
Total assets |
|
$ |
8,132,945 |
|
|
$ |
7,637,844 |
|
|
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
||
Line of credit payable |
|
$ |
— |
|
|
$ |
— |
|
Mortgages payable, including unamortized premium and net of unamortized debt cost |
|
|
10,875 |
|
|
|
11,395 |
|
Notes payable, net of unamortized discount and unamortized debt costs |
|
|
3,734,764 |
|
|
|
3,209,527 |
|
Accrued interest payable |
|
|
52,803 |
|
|
|
19,401 |
|
Other liabilities |
|
|
74,360 |
|
|
|
78,217 |
|
Total liabilities |
|
|
3,872,802 |
|
|
|
3,318,540 |
|
|
|
|
|
|
|
|
||
Stockholders' equity of NNN |
|
|
4,260,142 |
|
|
|
4,319,300 |
|
Noncontrolling interests |
|
|
1 |
|
|
|
4 |
|
Total equity |
|
|
4,260,143 |
|
|
|
4,319,304 |
|
|
|
|
|
|
|
|
||
Total liabilities and equity |
|
$ |
8,132,945 |
|
|
$ |
7,637,844 |
|
|
|
|
|
|
|
|
||
Common shares outstanding |
|
|
175,616 |
|
|
|
175,233 |
|
|
|
|
|
|
|
|
||
Gross leasable area, Property Portfolio (square feet) |
|
|
33,005 |
|
|
|
32,461 |
|
8
National Retail Properties, Inc.
Debt Summary
As of September 30, 2021
(in thousands)
(unaudited)
Unsecured Debt |
|
Principal |
|
|
Principal, |
|
|
Stated |
|
|
Effective |
|
|
Maturity Date |
||||
Line of credit payable |
|
$ |
— |
|
|
$ |
— |
|
|
L + 77.5 bps |
|
|
|
— |
% |
|
June 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unsecured notes payable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2024 |
|
|
350,000 |
|
|
|
349,782 |
|
|
|
3.900 |
% |
|
|
3.924 |
% |
|
June 2024 |
2025 |
|
|
400,000 |
|
|
|
399,558 |
|
|
|
4.000 |
% |
|
|
4.029 |
% |
|
November 2025 |
2026 |
|
|
350,000 |
|
|
|
347,814 |
|
|
|
3.600 |
% |
|
|
3.733 |
% |
|
December 2026 |
2027 |
|
|
400,000 |
|
|
|
398,956 |
|
|
|
3.500 |
% |
|
|
3.548 |
% |
|
October 2027 |
2028 |
|
|
400,000 |
|
|
|
397,878 |
|
|
|
4.300 |
% |
|
|
4.388 |
% |
|
October 2028 |
2030 |
|
|
400,000 |
|
|
|
398,892 |
|
|
|
2.500 |
% |
|
|
2.536 |
% |
|
April 2030 |
2048 |
|
|
300,000 |
|
|
|
295,964 |
|
|
|
4.800 |
% |
|
|
4.890 |
% |
|
October 2048 |
2050 |
|
|
300,000 |
|
|
|
294,128 |
|
|
|
3.100 |
% |
|
|
3.205 |
% |
|
April 2050 |
2051 |
|
|
450,000 |
|
|
|
441,681 |
|
|
|
3.500 |
% |
|
|
3.602 |
% |
|
April 2051 |
2052 |
|
|
450,000 |
|
|
|
439,586 |
|
|
|
3.000 |
% |
|
|
3.118 |
% |
|
April 2052 |
Total |
|
|
3,800,000 |
|
|
|
3,764,239 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total unsecured debt(1) |
|
$ |
3,800,000 |
|
|
$ |
3,764,239 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt costs |
|
|
|
|
|
(38,145 |
) |
|
|
|
|
|
|
|
|
|||
Accumulated amortization |
|
|
|
8,670 |
|
|
|
|
|
|
|
|
|
|||||
Debt costs, net of accumulated amortization |
|
|
|
(29,475 |
) |
|
|
|
|
|
|
|
|
|||||
Notes payable, net of unamortized discount and |
|
|
$ |
3,734,764 |
|
|
|
|
|
|
|
|
|
|||||
(1) |
|
Unsecured notes payable have a weighted average interest rate of 3.7% and a weighted average maturity of 14.9 years. |
Mortgages Payable |
|
Principal |
|
|
Interest |
|
|
Maturity Date |
||
Mortgage(1) |
|
$ |
10,901 |
|
|
|
5.230 |
% |
|
July 2023 |
|
|
|
|
|
|
|
|
|
||
Debt costs |
|
|
(147 |
) |
|
|
|
|
|
|
Accumulated amortization |
|
|
121 |
|
|
|
|
|
|
|
Debt costs, net of accumulated amortization |
|
|
(26 |
) |
|
|
|
|
|
|
Mortgages payable, including unamortized |
|
$ |
10,875 |
|
|
|
|
|
|
|
(1) |
|
Includes unamortized premium |
9
National Retail Properties, Inc.
Debt Summary
As of September 30, 2021
Credit Facility and Note Covenants
The following is a summary of key financial covenants for the company's unsecured credit facility and notes, as defined and calculated per the terms of the facility's credit agreement and the notes' governing documents, respectively, which are included in the company's filings with the Commission. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of September 30, 2021, the company believes it is in compliance with the covenants.
Unsecured Credit Facility Key Covenants |
|
Required |
|
September 30, 2021 |
Maximum leverage ratio |
|
< 0.60 |
|
0.36 |
Minimum fixed charge coverage ratio |
|
> 1.50 |
|
4.40 |
Maximum secured indebtedness ratio |
|
< 0.40 |
|
0.001 |
Unencumbered asset value ratio |
|
> 1.67 |
|
2.85 |
Unencumbered interest ratio |
|
> 1.75 |
|
5.03 |
|
|
|
|
|
Unsecured Notes Key Covenants |
|
Required |
|
September 30, 2021 |
Limitation on incurrence of total debt |
|
≤ 60% |
|
39.1% |
Limitation on incurrence of secured debt |
|
≤ 40% |
|
0.1% |
Debt service coverage ratio |
|
≥ 1.50 |
|
4.54 |
Maintenance of total unencumbered assets |
|
≥ 150% |
|
256% |
10
National Retail Properties, Inc.
Property Portfolio
Top 20 Lines of Trade
|
|
|
|
|
As of September 30, |
|
|
|
% of Rent |
|
|||||||
Line of Trade |
|
|
2021(1) |
|
|
|
2020(2) |
|
|
|
September 30, 2021(3) |
|
|||||
1. |
|
Convenience stores |
|
|
|
17.6 |
% |
|
|
|
18.2 |
% |
|
|
|
99.8 |
% |
2. |
|
Automotive service |
|
|
|
12.1 |
% |
|
|
|
10.2 |
% |
|
|
|
99.7 |
% |
3. |
|
Restaurants – full service |
|
|
|
9.9 |
% |
|
|
|
10.5 |
% |
|
|
|
94.7 |
% |
4. |
|
Restaurants – limited service |
|
|
|
9.0 |
% |
|
|
|
8.8 |
% |
|
|
|
99.7 |
% |
5. |
|
Family entertainment centers |
|
|
|
5.9 |
% |
|
|
|
6.7 |
% |
|
|
|
99.8 |
% |
6. |
|
Health and fitness |
|
|
|
5.1 |
% |
|
|
|
5.3 |
% |
|
|
|
100.0 |
% |
7. |
|
Theaters |
|
|
|
4.5 |
% |
|
|
|
4.5 |
% |
|
|
|
99.8 |
% |
8. |
|
Recreational vehicle dealers, parts and accessories |
|
|
|
4.0 |
% |
|
|
|
3.5 |
% |
|
|
|
99.8 |
% |
9. |
|
Equipment rental |
|
|
|
3.2 |
% |
|
|
|
2.6 |
% |
|
|
|
100.0 |
% |
10. |
|
Automotive parts |
|
|
|
3.1 |
% |
|
|
|
3.1 |
% |
|
|
|
98.3 |
% |
11. |
|
Home improvement |
|
|
|
2.5 |
% |
|
|
|
2.6 |
% |
|
|
|
99.5 |
% |
12. |
|
Wholesale clubs |
|
|
|
2.5 |
% |
|
|
|
2.6 |
% |
|
|
|
99.4 |
% |
13. |
|
Medical service providers |
|
|
|
2.1 |
% |
|
|
|
2.2 |
% |
|
|
|
98.1 |
% |
14. |
|
Furniture |
|
|
|
1.7 |
% |
|
|
|
1.7 |
% |
|
|
|
99.8 |
% |
15. |
|
General merchandise |
|
|
|
1.7 |
% |
|
|
|
1.7 |
% |
|
|
|
100.0 |
% |
16. |
|
Consumer electronics |
|
|
|
1.5 |
% |
|
|
|
1.5 |
% |
|
|
|
100.0 |
% |
17. |
|
Home furnishings |
|
|
|
1.5 |
% |
|
|
|
1.6 |
% |
|
|
|
100.0 |
% |
18. |
|
Travel plazas |
|
|
|
1.5 |
% |
|
|
|
1.5 |
% |
|
|
|
100.0 |
% |
19. |
|
Drug stores |
|
|
|
1.3 |
% |
|
|
|
1.5 |
% |
|
|
|
100.0 |
% |
20. |
|
Automobile auctions, wholesale |
|
|
|
1.3 |
% |
|
|
|
1.1 |
% |
|
|
|
100.0 |
% |
|
|
Other |
|
|
|
8.0 |
% |
|
|
|
8.6 |
% |
|
|
|
98.4 |
% |
|
|
Total |
|
|
|
100.0 |
% |
|
|
|
100.0 |
% |
|
|
|
99.1 |
% |
Top 10 States
|
|
State |
|
% of Total(1) |
|
|
|
|
State |
|
% of Total(1) |
|
||
1. |
|
Texas |
|
|
17.1 |
% |
|
6. |
|
Georgia |
|
|
4.6 |
% |
2. |
|
Florida |
|
|
8.7 |
% |
|
7. |
|
Indiana |
|
|
4.0 |
% |
3. |
|
Ohio |
|
|
5.6 |
% |
|
8. |
|
Tennessee |
|
|
3.8 |
% |
4. |
|
Illinois |
|
|
5.4 |
% |
|
9. |
|
Virginia |
|
|
3.4 |
% |
5. |
|
North Carolina |
|
|
4.7 |
% |
|
10. |
|
California |
|
|
3.3 |
% |
As a percentage of annual base rent, which is the annualized base rent for all leases in place. |
||
|
(1) |
$706,162,000 as of September 30, 2021. |
|
(2) |
$674,077,000 as of September 30, 2020. |
(3) |
Rent collections received as of October 27, 2021, excluding the repayment of amounts previously deferred according to the rent deferral lease amendments. |
|
11
National Retail Properties, Inc.
Property Portfolio
Top 20 Tenants
|
|
|
|
Properties |
|
|
% of Total(1) |
|
||
1. |
|
7-Eleven |
|
|
139 |
|
|
|
4.9 |
% |
2. |
|
Mister Car Wash |
|
|
121 |
|
|
|
4.7 |
% |
3. |
|
Camping World |
|
|
47 |
|
|
|
4.2 |
% |
4. |
|
LA Fitness |
|
|
30 |
|
|
|
3.7 |
% |
5. |
|
GPM Investments (Convenience Stores) |
|
|
153 |
|
|
|
3.2 |
% |
6. |
|
Flynn Restaurant Group (Taco Bell/Arby's) |
|
|
204 |
|
|
|
3.1 |
% |
7. |
|
AMC Theatre |
|
|
20 |
|
|
|
2.9 |
% |
8. |
|
Couche Tard (Pantry) |
|
|
79 |
|
|
|
2.6 |
% |
9. |
|
BJ's Wholesale Club |
|
|
12 |
|
|
|
2.5 |
% |
10. |
|
Sunoco |
|
|
59 |
|
|
|
2.1 |
% |
11. |
|
Mavis Tire Express Services |
|
|
123 |
|
|
|
2.1 |
% |
12. |
|
Frisch's Restaurants |
|
|
70 |
|
|
|
1.9 |
% |
13. |
|
Main Event |
|
|
18 |
|
|
|
1.8 |
% |
14. |
|
Fikes (Convenience Stores) |
|
|
59 |
|
|
|
1.7 |
% |
15. |
|
Chuck E. Cheese's |
|
|
53 |
|
|
|
1.6 |
% |
16. |
|
Best Buy |
|
|
16 |
|
|
|
1.5 |
% |
17. |
|
Bob Evans |
|
|
106 |
|
|
|
1.5 |
% |
18. |
|
Life Time Fitness |
|
|
3 |
|
|
|
1.5 |
% |
19. |
|
Dave & Buster's |
|
|
11 |
|
|
|
1.4 |
% |
20. |
|
Pull-A-Part |
|
|
20 |
|
|
|
1.4 |
% |
Lease Expirations(2)
|
|
% of |
|
# of |
|
Gross Leasable |
|
|
|
% of |
|
# of |
|
Gross Leasable |
2021 |
|
0.4% |
|
16 |
|
159,000 |
|
2027 |
|
6.9% |
|
187 |
|
2,838,000 |
2022 |
|
4.2% |
|
104 |
|
1,196,000 |
|
2028 |
|
4.7% |
|
157 |
|
1,245,000 |
2023 |
|
2.6% |
|
113 |
|
1,402,000 |
|
2029 |
|
2.8% |
|
71 |
|
987,000 |
2024 |
|
3.3% |
|
93 |
|
1,455,000 |
|
2030 |
|
3.6% |
|
105 |
|
1,185,000 |
2025 |
|
6.0% |
|
193 |
|
2,029,000 |
|
2031 |
|
8.9% |
|
198 |
|
3,039,000 |
2026 |
|
5.5% |
|
216 |
|
2,123,000 |
|
Thereafter |
|
51.1% |
|
1,694 |
|
14,722,000 |
(1) |
|
Based on the annual base rent of $706,162,000, which is the annualized base rent for all leases in place as of September 30, 2021. |
(2) |
|
As of September 30, 2021, the weighted average remaining lease term is 10.6 years. |
(3) |
|
Square feet. |
12
National Retail Properties, Inc.
Rent Deferral Lease Amendments
(in thousands)
The following table outlines the rent deferred and corresponding recapture payback by quarter of the rent deferral lease amendments executed as of September 30, 2021 (dollars in thousands):
|
|
|
Deferred |
|
|
|
Scheduled Repayment |
|
||||||||||||||||||||||||||||||
|
|
|
Accrual |
|
|
Cash |
|
|
Total |
|
|
% of |
|
|
|
Accrual |
|
|
Cash |
|
|
Total |
|
|
% of |
|
|
Cumulative |
|
|||||||||
2020 |
|
|
$ |
33,594 |
|
|
$ |
18,425 |
|
|
$ |
52,019 |
|
|
|
91.7 |
% |
|
|
$ |
3,239 |
|
|
$ |
20 |
|
|
$ |
3,259 |
|
|
|
5.7 |
% |
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2021 |
Q1 |
|
|
678 |
|
|
|
2,018 |
|
|
|
2,696 |
|
|
|
4.7 |
% |
|
|
|
10,059 |
|
|
|
610 |
|
|
|
10,669 |
|
|
|
18.8 |
% |
|
|
24.5 |
% |
|
Q2 |
|
|
278 |
|
|
|
750 |
|
|
|
1,028 |
|
|
|
1.8 |
% |
|
|
|
8,599 |
|
|
|
1,751 |
|
|
|
10,350 |
|
|
|
18.2 |
% |
|
|
42.7 |
% |
|
Q3 |
|
|
34 |
|
|
|
750 |
|
|
|
784 |
|
|
|
1.4 |
% |
|
|
|
4,328 |
|
|
|
1,740 |
|
|
|
6,068 |
|
|
|
10.7 |
% |
|
|
53.4 |
% |
|
Q4 |
|
|
— |
|
|
|
250 |
|
|
|
250 |
|
|
|
0.4 |
% |
|
|
|
2,949 |
|
|
|
1,740 |
|
|
|
4,689 |
|
|
|
8.3 |
% |
|
|
61.7 |
% |
|
|
|
|
990 |
|
|
|
3,768 |
|
|
|
4,758 |
|
|
|
8.3 |
% |
|
|
|
25,935 |
|
|
|
5,841 |
|
|
|
31,776 |
|
|
|
56.0 |
% |
|
|
61.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2022 |
Q1 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
1,780 |
|
|
|
2,283 |
|
|
|
4,063 |
|
|
|
7.2 |
% |
|
|
68.9 |
% |
|
Q2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
1,729 |
|
|
|
2,284 |
|
|
|
4,013 |
|
|
|
7.1 |
% |
|
|
76.0 |
% |
|
Q3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
1,201 |
|
|
|
2,284 |
|
|
|
3,485 |
|
|
|
6.1 |
% |
|
|
82.1 |
% |
|
Q4 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
681 |
|
|
|
2,284 |
|
|
|
2,965 |
|
|
|
5.2 |
% |
|
|
87.3 |
% |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
5,391 |
|
|
|
9,135 |
|
|
|
14,526 |
|
|
|
25.6 |
% |
|
|
87.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2023 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
19 |
|
|
|
3,334 |
|
|
|
3,353 |
|
|
|
5.9 |
% |
|
|
93.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2024 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
1,932 |
|
|
|
1,932 |
|
|
|
3.4 |
% |
|
|
96.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2025 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
1,931 |
|
|
|
1,931 |
|
|
|
3.4 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
$ |
34,584 |
|
|
$ |
22,193 |
|
|
$ |
56,777 |
|
|
|
|
|
|
$ |
34,584 |
|
|
$ |
22,193 |
|
|
$ |
56,777 |
|
|
|
|
|
|
|
|||
13